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Before the
FEDERAL COMMUNICATIONS COMMISSION
Washington, D.C. 20554

In the Matter of

Application by
Qwest Communications International, Inc.
for Authorization to Provide
In-Region, InterLATA Services
in the State of Minnesota

Evaluation of the U.S. Department of Justice, In re: Joint Application by
BellSouth Corporation, BellSouth Telecommunications, Inc., and BellSouth
Long Distance, Inc. for Provision of In-Region InterLATA Services in
Georgia and Louisiana, FCC CC Docket No. 01-277 (Nov. 6, 2001),
available at <http://www.usdoj.gov/atr/public/comments/sec271/sec271.htm>.

Evaluation of the U.S. Department of Justice, In re: Application of SBC
Communications Inc., et al., Pursuant to Section 271 of the
Telecommunications Act of 1996 to Provide In-Region InterLATA Services in
the State of Oklahoma, FCC CC Docket No. 97-121 (May 16, 1997),
available at <http://www.usdoj.gov/atr/public/comments/sec271/sec271.htm>.

Memorandum Opinion and Order, In re: Application by Qwest
Communications International, Inc. for Authorization to Provide In-Region,
InterLATA Services in the States of New Mexico, Oregon, and South Dakota,
FCC 03-03-81 (Apr. 15, 2003), available at 2003 WL 1877789 and
<http://www.fcc.gov/Bureaus/Common_Carrier/in-region_applications>.

Order After Consideration on Own Motion, In re: Complaint of the
Minnesota Department of Commerce Against Qwest Corporation Regarding
Unfiled Agreements, Minnesota PUC Docket No. P-421/C-02-197 (Apr. 30,
2003), available at http://www.puc.state.mn.us/docs/orders/03-0050.pdf.

Application by
Qwest Communications International, Inc.
for Authorization to Provide
In-Region, InterLATA Services
in the State of Minnesota

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WC Docket No. 03-90

EVALUATION OF THE
UNITED STATES DEPARTMENT OF JUSTICE

Introduction and Summary

The United States Department of Justice ("the Department"), pursuant to
Section 271(d)(2)(A) of the Telecommunications Act of 1996(1) ("the 1996 Act"), submits this
Evaluation of the Application filed by Qwest Communications International, Inc. on March 28,
2003, to provide in-region, interLATA services in Minnesota. Qwest's Application to the
Federal Communications Commission ("FCC" or "Commission") is its first for long distance
authority in this state. It follows the FCC's approval of Qwest's applications for long distance
authority in Colorado, Idaho, Iowa, Montana, Nebraska, New Mexico, North Dakota, Oregon,
South Dakota, Utah, Washington, and Wyoming.(2)

As the Department has explained, in-region, interLATA entry by a regional Bell
Operating Company ("BOC") should be permitted only when the local markets in a state have
been "fully and irreversibly" opened to competition.(3) Qwest's application demonstrates that it
has succeeded in opening its local markets in Minnesota in many respects. The Operations
Support Systems ("OSS") in Minnesota are the same as those reviewed and approved by the
Commission in its orders pertaining to Qwest's previous applications,(4) and the performance data
submitted in support of this application appear generally consistent with the data submitted in
support of those applications.(5) Nonetheless, three of the four participating Minnesota Public
Utilities Commission ("Minnesota PUC") Commissioners have opposed Qwest's application
based on its having entered into discriminatory interconnection agreements with certain CLECs.(6)
While the Department does not dispute the Minnesota PUC's expert assessment of the
underlying facts,(7) it continues to defer to this Commission's prior decision regarding the
relevance of these circumstances to the Section 271 process.(8) "[A]llegations of past
discrimination do not appear to implicate the Department's inquiry into whether local exchange
markets are fully and irreversibly open to competition[.]"(9) The Department therefore
recommends that the Commission approve Qwest's application for long distance authority in
Minnesota, if it is able to assure itself that the concerns expressed in this Evaluation have been
resolved.

I. State Commission Section 271 Proceedings

The Minnesota PUC, working independently and with other state commissions, has
facilitated the development of competition in its local telecommunications market.

Regional Oversight Committee Proceedings/OSS Test

In 1999, the Regional Oversight Committee ("ROC"), a cooperative group of state
regulatory commissions in the Qwest local service region, including Minnesota, initiated a
collaborative process focusing on the attainment of Section 271 authority by examining the legal
framework for opening local markets, and by designing and executing a third-party OSS test.(10)
As explained in the Department's Qwest Multistate I Evaluation, repeated iterations of
documentation, systems, and processes, and substantial retesting throughout the testing
conducted by KPMG, improved Qwest's OSS "to the point where only a few questions regarding
their adequacy to support competitive local entry" remained when Qwest filed its first Section
271 applications.(11)

Minnesota PUC Proceedings

The Minnesota PUC conducted state-specific pricing proceedings to establish unbundled
network element ("UNE") rates that appear consistent with the Commission's prior analysis
using the Colorado rates as benchmarks of TELRIC compliance.(12) It adopted the performance
measurements and standards developed through the ROC,(13) including the Minnesota
Performance Assurance Plan ("MPAP") based on Qwest's post-entry performance assurance plan
first filed in Colorado.(14) It also conducted an enforcement proceeding concerning "unfiled
agreements" between Qwest and certain CLECs, in which it found that the interconnection
agreements should have been filed pursuant to Section 252 of the Act, that Qwest's failure to do
so constituted discrimination in favor of those particular CLECs, and that financial penalties
were warranted.(15) Although the Minnesota PUC determined that "Qwest has satisfied 12 of the
14 Checklist Items in 47 U.S.C. § 271(c)(2)(B)," it "did not reach a collective determination with
respect to Checklist Items No. 2 and No. 14," pertaining to unbundled network elements and
resale, respectively, and "regarding public interest issues."(16)

II. Entry into the Local Telecommunications Markets

In assessing whether the local markets in a state are fully and irreversibly open to
competition, the Department looks first to the actual entry in a market.(17) But the Department
does not broadly presume that all three entry tracks — facilities-based, UNEs, and resale — are
open or closed on the basis of an aggregate level of entry alone.(18) The following table reports
CLEC entry in Minnesota in terms of shares of total residential and business lines served and
shares of residential and business lines served by each mode of entry.

Given the regional nature of Qwest's OSS, the Department evaluates entry regionwide,
taking note that pricing or other state-specific factors may significantly affect the degree to which
CLECs use a mode of entry in a particular state. In Minnesota, the levels of entry, the evidence
from entry in other states within the region, and the absence of evidence that entry has been
unduly hindered by problems with obtaining inputs from Qwest, lead the Department to conclude
that opportunities are available to competing carriers serving business customers.

Regarding competition for residential customers, the Department finds that the facilities-based mode of entry is open in Minnesota.(23) Although there is less entry to serve residential
customers via the UNE-platform, the Department does not believe there are any material
obstacles to such entry created by Qwest.(24) The Department also concludes, due largely to the
absence of CLEC complaints, that Qwest has fulfilled its obligations to open the resale mode of
entry to competition in Minnesota.(25)

III. Billing

Two of four Minnesota PUC Commissioners state that Qwest has proven that its billing
accuracy is sufficient to satisfy Checklist Item 2: "The ROC OSS test and Qwest performance
results conclusively establish that Qwest is meeting all Section 271 standards relating to the
provisioning of DUF [daily usage files]."(26) The other two Minnesota PUC Commissioners
participating in this proceeding state that the record "shows conclusively that UNE-Star does not
meet the standards for a UNE-P offering, particularly with respect to billing accuracy," and that
"Qwest has not shown by the preponderance of evidence that its billing accuracy in Minnesota is
sufficient to support a finding of compliance with checklist item No. 2."(27)

Although the Minnesota ALJ's OSS Report was issued after this Commission's Order
approving Qwest's third multistate application, the difference in time appears to reflect a
difference in process rather than in the underlying facts reviewed: Minnesota PUC
Commissioners Scott and Johnson have clearly characterized their concerns regarding Qwest's
billing as related to UNE-Star,(28) and this Commission has already determined that these "UNE-Eschelon/UNE-Star" billing issues "appear to be disputes between the parties, and more
appropriate for the interconnection dispute resolution process."(29) Moreover, although Qwest's
own performance reports reflect billing inaccuracies in Minnesota,(30) the errors are not obviously
distinguishable from the "one-time rate errors" and other misses deemed "de minimis" by the
Commission in its prior orders.(31)

IV. Impact of Unfiled Agreements

The Minnesota PUC understandably has been troubled by Qwest's failure to file for
approval various interconnection agreements between Qwest and certain CLECs. The
Department commends the Minnesota PUC for its careful attention to this matter(32) and does not
dispute its conclusion that Qwest's failure to file these written and oral agreements was a
"knowing and intentional violation" of Section 252's filing requirements and of Section 251's
nondiscrimination requirements.(33) Nonetheless, the Department respectfully defers to this
Commission's previous Qwest 271 orders concluding that the "record does not demonstrate
ongoing discrimination"(34) and rejecting the argument "that Qwest currently violates section
252(a) and that approval of Qwest's joint application would be against the public interest."(35)

The Department observed in its evaluation of Qwest's initial section 271 application that
the allegations, if proven, could have justified the imposition of sanctions "including suspension
or revocation of any Section 271 authority" but did not conclude that this "remedy for such prior
violations" was required.(36) This Commission has consistently determined that Qwest's "knowing
and intentional" violations relate to past practices and should be dealt with in separate
enforcement proceedings outside the Section 271 process.(37)

V. Conclusion

Qwest's application demonstrates that it has succeeded in opening its local markets in
Minnesota to competition in many respects. Based on this record, and subject to the
Commission's assuring itself that the concerns expressed in this Evaluation have been resolved,
the Department recommends that the FCC approve Qwest's application.

I hereby certify that I have caused a true and accurate copy of the foregoing Evaluation of
the United States Department of Justice to be served on the persons indicated on the attached
service list by first class mail, overnight mail, hand delivery, or electronic mail on May 2, 2003.

5. See Qwest Br. at 71 ("This Application makes the same showing with respect to Minnesota" that
Qwest made in earlier Section 271 proceedings.). See generally Qwest Reynolds Decl. (addressing commercial
performance results); FCC Qwest Multistate I Order Apps. B-J (listing performance results); FCC Qwest
Multistate II Order Apps. B-E (same). Both AT&T and WorldCom have complained about excessive EDI reject
rates. AT&T Finnegan Decl. ¶¶ 40-48 (noting AT&T's reject rates rose from a range of 17-22 percent in 2002 to
approximately 42 percent in February, even as volumes declined); WorldCom New Mexico/Oregon/South Dakota
OSS Ex Parte at 2 (describing WorldCom's reject rate of nearly 100 percent in January, reduced to 55.6 percent for
the week ending April 4). Qwest's performance data showed aggregate CLEC auto-reject rates rising from the mid-20 percent range in September through December of 2002 to 48.51 percent in January, 38.07 percent in February,
and 49.16 percent in March of 2003. Qwest Performance Results Ex Parte at 81 (PID PO-4B-2 (LSRs Rejected for
EDI — Auto-Rejected)). In its filing Qwest neither explained this result nor presented CLEC-specific performance
data of the sort that have justified this Commission's prior findings that variations in reject rates among CLECs
demonstrate that Qwest's OSS meets the requisite standards. See FCC Qwest Multistate I Order ¶ 89 & n.314; see
also Qwest Williams Decl. ¶¶ 139-41 (providing selective reject rates for "four particular [unnamed] CLECs").
Qwest presented an explanation of the January and February results along with CLEC-specific reject and flow-through data in an ex parte filing on April 22. See Qwest Reject Rates Ex Parte. However, much of the data in the
electronic spreadsheet appeared to have been obscured until Qwest filed an unfiltered version of the document a
week later. Qwest Reject Rates/Spreadsheet Correction Ex Parte at 1 (acknowledging that "several rows and
columns were not visible because a specific feature on the Excel spreadsheet had been engaged" at the time of
Qwest's April 22 filing); see also AT&T Reject Rates/Spreadsheet Ex Parte at 1-2 (asserting that Qwest initially
provided to AT&T only a portion of the confidential data that Qwest had actually submitted in the electronic version
of its April 22 ex parte). The Department recommends that the Commission review this and subsequent months'
performance data to ensure that Qwest's OSS remains checklist compliant. See FCC Qwest Multistate II Order ¶ 55
n. 171 (noting the improvement in WorldCom's order reject rate to 53 percent for the week beginning March 22,
2003).

6. See Minnesota PUC Reha Comments at 26-29; Minnesota PUC Scott/Johnson Comments
at 32-37. One state commissioner was recused from the proceeding. Minnesota PUC Comments at 2.

7. SeeFCC Qwest Multistate I Order ¶ 491 (observing that states are "best equipped" to resolve
such factual disputes).

8. See id. ¶¶ 466-91 (reviewing the allegations regarding Qwest's having entered into "secret"
agreements with certain CLECs and determining that the record did "not demonstrate ongoing discrimination" or
noncompliance with Section 252 that would warrant rejection of Qwest's Section 271 applications); FCC Qwest
Multistate II Order ¶¶ 124-34 (same); see also DOJ Qwest Multistate I Evaluation at 2-5 ("[I]t is not apparent that
the remedy for such prior [Section 251 or 252] violations, if any, lies in these proceedings rather than in effective
enforcement through dockets in which such matters are directly under investigation.").

9. DOJ Qwest Multistate I Evaluation at 4; see also Minnesota PUC Unfiled Agreements Penalties
Modification Order at 8-9 (explaining that statements by Eschelon and McLeod regarding the term and termination
of their unfiled interconnection agreements with Qwest eliminate any "clearly defined equitable basis for the
forward-looking remedy imposed" in the Minnesota PUC's initial penalty order).

16. Minnesota PUC Comments at 2; see also Minnesota PUC Koppendrayer Comments at 24
(asserting Qwest satisfied all checklist and public interest requirements); Minnesota PUC Reha Comments at 26-29
(asserting Qwest failed to satisfy Checklist Item 14 due to discrimination in resale terms and conditions, and "until
Qwest implements the restitution [ordered by PUC in unfiled agreements proceeding], it has not leveled the
competition field and has not fully addressed my concerns related to the public interest"); Minnesota PUC
Scott/Johnson Comments at 32-37 (asserting Qwest failed to satisfy Checklist Item 14 due to discrimination in
resale terms and conditions, failed to satisfy Checklist Item 2 due to inadequacies in its billing OSS, and that the
grant of Qwest's application is not consistent with the public interest). See also infra Sections III & IV.

17. See DOJ Pennsylvania Evaluation at 3-4 ("The Department first looks to actual competitive entry,
because the experience of competitors seeking to enter a market can provide highly probative evidence about the
presence or absence of artificial barriers to entry. Of course, entry barriers can differ by types of customers or
geographic areas within a state, so the Department looks for evidence relevant to each market in a state." (Footnote
omitted.)).

18. See, e.g., DOJ Georgia/Louisiana I Evaluation at 7 ("Although the Department presumes that fully
facilities-based competition is not hindered in a competitively significant manner based on the entry recorded in
Georgia, the amount of entry does not justify extending such a presumption to other modes of entry in Georgia.");
DOJ Missouri I Evaluation at 6-7 ("The Department presumes that opportunities to serve business customers by
fully facilities-based carriers and resellers are available in Missouri, based on the entry efforts reflected in SBC's
application. There is significantly less competition to serve residential customers. There also is less competition by
firms seeking to use UNEs, including the UNE-platform, and there are some indications that a failure by SBC to
satisfy all of its obligations may have constrained this type of competition." (Footnotes omitted.)).

19. See Qwest Teitzel Decl. at 13 tbl. (line counts as of December 2002) & Ex. DLT-Track A/PI-MN-1 at 1, 4. The second three categories report CLEC lines as percentages of total lines, business lines, and
residential lines, respectively; the last six categories report percentages of business and residential lines served by
CLECs by means of each mode of entry, i.e., facilities-based (service via primarily a CLEC's own fiber optic
network that is either connected directly to the customer premises or connected through loops leased from the
BOC), UNE-platform (a combination of loop, switch, and transport elements), and resale.

Qwest offers two sets of calculations of line estimates, see id. ¶¶ 19-25, and, as explained previously, the
Department generally relies on the E-911 database entries, see, e.g., DOJ Georgia/Louisiana I Evaluation at 8 n.24;
see also DOJ Qwest Multistate I Evaluation at 12 n.48. However, E-911 database entries understate the number of
CLEC facilities-based lines because such records do not reflect lines served by independent LECs within Qwest
service territory. Qwest Teitzel Decl. ¶ 21 n.22.

20. Figures report total lines in Qwest's service area in this state, which has several incumbent local
exchange carriers other than Qwest. See, e.g., Qwest Teitzel Decl. ¶ 21.

21. Qwest Multistate I UNE-Platform Calculations Ex Parte at 1-2 (explaining estimate of business
and residential line counts).

23. In particular, Comcast's (previously AT&T Broadband's) cable telephony service is available to a
sizable number of homes in the Twin Cities. Qwest Teitzel Decl. Ex. DLT-Track A/PI-MN-4 at 3-4.

24. AT&T has raised a new claim that Qwest does not adequately provide billing completion notifiers
("BCNs"). AT&T Finnegan Decl. ¶¶ 22-39 (asserting Qwest does not provide BCNs for CLECs using EDI because
it does not adequately document how CLECs can set up EDI interfaces to receive BCNs, and that Qwest may send
multiple BCNs per order, thus complicating a CLEC's assessment of when it can begin billing the end-user). Qwest
admits that no CLECs are receiving BCNs via EDI. Qwest Williams Decl. ¶¶ 210-14 (stating "no CLECs currently
have signed up for IMA-EDI status updates within Qwest's 14-state territory, notwithstanding the fact that Qwest is
fully able to transmit [BCNs] via IMA-EDI"); see also Qwest Notarianni/Doherty Decl. ¶ 512 (asserting "Qwest
sends out or makes available" a BCN and to receive BCNs via EDI a CLEC must "subscribe . . . either by calling
the Wholesale Systems Help Desk or through IMA-EDI certification"). The record is unclear as to whether the
difficulties of which AT&T complains account for CLECs' apparent lack of interest in receiving BCNs via EDI:
AT&T's complaint was not raised in prior Qwest Section 271 proceedings before this Commission nor was it
mentioned by the ALJ in Minnesota's Section 271 docket. See Minnesota ALJ OSS Report Section XIV.
Nonetheless, the Department commends it to the Commission's attention given the critical importance of timely and
accurate BCNs to the CLECs' ability to bill end-user customers. See, e.g., FCC New Jersey Order ¶¶ 93, 102.

30. Qwest Williams Decl. ¶¶ 204-05 ("Qwest did not meet the parity standard for [performance
measure] BI-3A in any of the past four months.").

31. See, e.g., FCC Qwest Multistate I Order ¶ 128-29 ("We are persuaded that these misses have been
satisfactorily corrected and do not affect a competitive LEC's ability to compete."). The Department notes that
Qwest still appears to have problems with implementation of BOS-BDT billing. Seegenerally DOJ Qwest
Multistate II Evaluation at 13-14; DOJ Qwest Multistate III Evaluation at 7-8. AT&T complains that Qwest's bills
continue to contain inaccuracies which have been unresolved for over a year and that the BOS-BDT bills have been
"usually out of balance" since BOS-BDT billing was implemented, so that AT&T "must still rely on the CRIS paper
bills for processing." AT&T Finnegan Decl. ¶¶ 56-57; AT&T Billing/Reject Rates Ex Parte at 1-2. Qwest
acknowledges that it "is continuing to work on its BOS offering and continues to implement improvements now and
in the coming months." Qwest Notarianni/Doherty Decl. ¶ 458. "The Department expects Qwest to fully support
the continued development of its BOS-BDT wholesale billing system so that CLECs can receive their wholesale
bills in a format consistent with that offered by other BOCs and compatible with the CLECs' systems." DOJ Qwest
Multistate III Evaluation at 8; see alsoFCC Qwest Multistate I Order ¶ 125 ("[W]e are encouraged by Qwest's
demonstrated willingness to work collaboratively with competing LECs to produce accurate and timely BOS
bills.").

32. See DOJ Qwest Multistate I Evaluation at 3 ("These allegations are serious and deserve the
Commission's careful attention.").

35. FCC Qwest Multistate I Order ¶ 490; see alsoid. ¶ 491 (rejecting "the commenters' assertion that
Qwest has not filed all previously unfiled agreements with the state commissions" including "an oral agreement
between Qwest and McLeod," based on Qwest's response that any agreements not filed were "expired, terminated,
superseded" or otherwise did not need to be filed, and noting that "on September 16, 2002, Qwest and McLeod
agreed to terminate the written contract and any and all amendments without addressing whether any such oral
agreement ever existed").

36. DOJ Qwest Multistate I Evaluation at 3. The Minnesota PUC has sought substantial monetary
sanctions pursuant to its enforcement authority. Minnesota PUC Unfiled Agreements Penalties Order at 2-6, 20-21;
Minnesota PUC Unfiled Agreements Penalties Modification Order at 4-7 (rejecting Qwest's argument that the
Minnesota PUC does not have authority under state law to "correct Qwest's knowing and intentional discrimination
against certain CLECs and their customers").

37. FCC Qwest Multistate II Order ¶¶ 133-34 (recognizing New Mexico PUC has found Qwest to
have "knowingly and intentionally" violated Section 252); see alsoFCC Qwest Multistate I Order ¶ 466 (citing
Minnesota ALJ Unfiled Agreements Recommendation of September 20, 2002, and Minnesota PUC Unfiled
Agreements Order of November 1, 2002), ¶ 491 (noting Minnesota PUC found that an oral agreement between
Qwest and McLeod existed but had not been filed). But see Minnesota PUC Scott/Johnson Comments at 36 ("A
denial of wrong-doing, combined with Qwest's failure to implement the ordered remedy, makes Qwest's conduct
very much in the PRESENT, not the past.").